Sea Fees vs Truck Bucks

On April 4, 2012, in our Vol. XXXI, Art. 11 commentary, we wrote … and wondered:

“We’ve designed and patented a Short Sea Shipping vessel that will do the work of 424 trucks or rail cars, and dozens of these Jones Act vessels could be built every year in U.S. shipyards. Their use would greatly reduce the cost of goods, the level of air pollution, and the wear and tear on our stressed-out highway system. Currently, however, vessels engaged in Short Sea Shipping in the U.S. move just 6% of the nation’s freight tonnage. In Europe, Short Sea vessels move more than 40% of freight tonnage … So why can’t we?”, we asked.

Well, we found the answer to that question. It was revealed in a SeaNews Turkey article on September 4th. Here it is, verbatim.

“The heavy cost of port charges on short-sea shipping need to be reduced if the ‘Motorways of the Sea’ (MoS) service is to survive, says LD Lines boss Christophe Santoni. The LD Lines managing director was speaking as the ro-ro company was contemplating shutting down its thrice-weekly service between Nantes-Saint Nazaire and Gijon, in Spain as EU funding comes to an end.

“‘Port charges, pilotage, mooring, stevedoring, etc., represent 30 per cent of costs. If ports are interested in attracting MoS they must contribute to making short-sea shipping less expensive through the provision of special rates,’ he said.

“The likely demise of MoS service has raised questions whether such eco-friendly freight systems are financially sustainable when faced with truck competition. The French and Spanish governments have spent EUR15 million (US $ 19.7 million) apiece on the Nantes St. Nazaire-Gijon MoS since September 2010 with the service also receiving a further EUR4 million through the EU’s Marco Polo programme. Without this, MoS would have posted annual losses of EUR6 million.

“Mr. Santoni continues to hope for rescue. ‘With the two governments, we continue to look for solutions and a business plan that would enable us to maintain the service without recourse to public money or with less of it.’ he said. ‘Experience over the past four years has shown that the Nantes-Saint Nazaire-Gijon service is appreciated by customers with high load factors. But truckers agree to take the ship only if it is no more expensive than the road,’ he said.” —

So there you have it. Although it was never openly admitted, European Short Sea Shipping has been subsidized all along, and when financial support is no longer available, services like the MoS become total failures – just like all our U.S. Short Sea Shipping ventures.

Here’s our next question. Isn’t it about time Short Sea shippers, here and abroad, made use of our patented, highly efficient, time-saving, and highly profitable container ship design?

That’s the only “rescue” that could pay off for Mr. Santoni, the governments, and the ports.